Investments in the Education Sector: Different Perspectives

Investments in the Education Sector: Different Perspectives

Often, the educational sector is thought of as very different from other industries, as its prime goal is not to turn a financial profit, but instead to educate and impart information to students.

However, just like any other industry, the educational sector requires the investment of capital. These investments, like any other, should be carefully planned and applied in order to maximize the return. In the case of education, however, the return is measured less by financial gain than by the quality of the education a given institution produces.

Investment in Education from Institutions

One side of this education investment equation comes from the side of the institutions themselves. Secondary schools, vocational schools and universities all make investments in their classrooms in the form of educational resources, technology and even the teachers and professors that are hired to convey information to students. These institutions, like any other business that is making a capital investment, must carefully decide how limited resources are to be allocated in order to produce the greatest returns in the most efficient manner.

In recent years, one of the best methods for greatly improving the educational experience of students with relatively small amounts of capital investment has been to diversify classroom learning with technological resources. Online resources provided to students are often quite inexpensive for schools, and can add much to the body of knowledge that students receive. These resources can range from free MOOCs that complement the classes that students are already taking to the use of digital format books to make a wider corpus of texts available to students at more reasonable prices than traditional physical textbooks. Taking this concept one step further is the idea of the online university. By making classes available entirely through online platforms, many universities have been able to reach broader audiences of students and to provide them with excellent education at an economical price. The investment necessary to host a proprietary online learning platform can be quite extensive, but can also turn the school a profit in the long run. When students interface with professors online, rather than in physical classrooms, expenses are lower and more students may be brought into classes at once, producing both a monetary gain and the ability to provide better education to a larger population of students.

Educational Investment from a Student Perspective

At its core, education is a product. As such, it is driven by the same laws of free-market economics that determine the pricing and availability of any other product. While institutions invest capital to create and improve their educational product, students also invest in education by purchasing it. Like institutions, these students must decide what method of investing in education will produce the highest return on their investment.

Different students will view this question differently. For some, the decision of how their money is best invested will be driven by a single factor: potential financial return. These students approach education only as a tool for increasing their earnings, and so will choose the school and major they pursue by this criterion. Other students, however, will take a more holistic view of the choice. These students will still view earning potential as an important factor, but will also consider the overall education they receive to be important. In many cases, the difference between these two viewpoints will determine whether a university or a vocational school is the best fit for a given student.

For the latter variety of students, free online educational resources have somewhat complicated the question. MOOCs and other free online courses have made information available that previously could only be found in a traditional classroom environment. This has led many students to pursue their educations outside of institutions of higher learning. However, there are significant limits to this approach, particularly when it comes to applying information acquired in online courses to the pursuit of a career.

Though education is a massively important part of any student's life, it is still, fundamentally, a product that must be invested in. Institutions invest in it in order to gain a competitive edge and to provide students with the best possible education. Students, on the other hand, invest in it in order to increase their earning potential and to broaden their knowledge base. Both students and schools, however, are investing real capital in an industry that is very much a business.

This article was written by the Duncan Ryan from - UKs leading investment guide.

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About the Author
Author: Duncan RyanWebsite:
Duncan Ryan is Senior Editor at and is a financial and political journalist. His areas of expertise include foreign policy and international business. He is also the author of a series of short histories of the civilizations of the ancient world.

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